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Sec. 6038D Reporting of Specified Foreign Financial Assets Postponed for One Year

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The
IRS on Wednesday announced that it is postponing for at least
one year the requirement that domestic entities report
interests in specified foreign financial assets. In Notice 2013-10, the IRS says that when
it issues final regulations, they will apply no earlier than
to tax years beginning after Dec. 31, 2012.

Sec. 6038D
requires individuals to report interests in “specified foreign
financial assets” (SFFAs) when filing their federal income tax
returns. The IRS is also authorized under Sec. 6038D to apply
the reporting requirement to any domestic entity that is
formed or availed of principally to avoid reporting (a
specified domestic entity).

In December 2011, the IRS
issued temporary and proposed regulations (T.D. 9567; REG-130302-10) on the Sec.
6038D reporting requirement. The proposed regulations set out
conditions under which a domestic entity will be considered a
specified domestic entity and, therefore, required to report
SFFAs in which the entity holds an interest. They were
proposed to apply to tax years beginning after Dec. 31,
2011.

The winner of The Tax Adviser’s 2014 Best Article Award is James M. Greenwell, CPA, MST, a senior tax specialist–partnerships with Phillips 66 in Bartlesville, Okla., for his article, “Partnership Capital Account Revaluations: An In-Depth Look at Sec. 704(c) Allocations.”

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